R*Shares Banking ETF
(An Open Ended, Exchange Listed, Index Linked Scheme)
Contents
Why Equity ETF?
Page 2
Strategies used through Index based Equity ETFs
Page 2
Transaction Options available for investors
Page 3
Creation Unit Size
Page 3
R*Shares Banking ETF
Page 4
Positioning – R*Shares Banking ETF
Page 4
Investment Objective: R*Shares Banking ETF
Page 4
Benefits of R*Shares Banking ETF
Page 4
Why Invest in Nifty Bank?
Page 4
Current Valuations
Page 5
Constituents of R*Shares Banking ETF
Page 5
Scheme Features R*Shares Banking ETF
Page 6
Disclaimers
Page 6
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Reliance Capital Asset Management is one of the largest asset managers with more than 20 years of
experience in managing wealth of investors with a robust distribution network in India and a global reach
through its various subsidiaries.
To cater to the increasing demand for passive management, we offer a variety of Exchange Traded Funds
(ETFs) under a distinct identity “R*Shares”. Currently, we offer seven equity ETF’s – benchmarked against
Nifty Bank Index, Nifty 100 Index, Nifty 50 Index, Nifty India Consumption Index, Nifty Dividend Opportunities
50 index, Nifty 50 Value 20 Index & S&P BSE Sensex Index.
Why Equity ETF?
 Ease of transaction - Can be easily bought / sold like any other stock on the exchange through terminals
spread across the country
 Ease of Liquidity - Can be bought / sold anytime during market hours (subject to availability of
buyer/seller) at prices prevailing in the market. Thus, investor transacts at real-time prices.
 Low Cost - Generally less expensive than investing in multiple individual securities or a mutual fund
 Other Special Features
o
Instant diversification through exposure to a large number of stocks by purchasing as low as 1 unit
o
Buying / selling at close to live price and not end-of-day, also ability to put limit orders
o
Authorised Participants / Large investors can buy in creation unit size directly from the AMC at Live
Prices un creation unit sizes
Strategies used through Index based Equity ETFs
 Liquidity Management - ETFs can be used for a given percentage of each asset class to provide a liquidity
buffer across the asset allocation
 Portfolio Completion - ETFs allow investors to gain exposure to an asset class that is under-represented in
the asset allocation
 Cash Equitization – ETFs assist in remaining fully invested into equity as per the allocation model, while
maintaining liquidity, thus minimizing the cash drag effect on the portfolio
 Portfolio Transitions – Since ETFs are passive funds, they may help maintain market exposure while there
are changes in sector/stock allocations in a portfolio, hence avoids the risk of missing any market
movement
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Transaction Options available for investors
Subscription
Process
Features
Through Stock Exchange
online terminal /
stock broker
•
•
•
•
•
•
Through AMC
(Authorized Participants
& Large Investors)
Transaction form
with requisite
documents
• Can transact in multiples of creation unit size
• Can happen in Cash or basket of stocks
• Transaction in exchange of Portfolio deposit & Cash
Component
Redemption
Process
Features
Through Stock Exchange
online terminal /
stock broker
• Can trade as less as 1 Unit
• Units taken on T+1
• Amount credited T+2
Through AMC
(Authorized Participants
& Large Investors)
Redemption
Request
• Can trade in multiples of creation unit size
• Can happen in Cash or basket of stocks
• Transaction in exchange of Portfolio deposit & Cash
Component
Can trade as less as 1 Unit
Funding to be done on T+1
Unit credit on T+2
Transaction on Exchange traded price
No paperwork
Transaction on order matching and availability of quotes
Live Prices (NAV) with the basket is available on Bloomberg page “RITE” for reference
Creation Unit Size
Creation Unit size is the minimum denomination of unit that can be directly purchased/redeemed from AMC
Tradable Unit
Composition
Creation Unit Size
NAV Value
29-Feb-16
Approx. Basket
Value (Rs.)
1 Unit R*Shares
Banking ETF
~ 1/10 of Nifty Bank
Index
1000 units of R*Shares
Banking ETF
1509.0408
15,09,041
* NAV as of 29-feb-16 taken as reference value
Importance of Creation Unit Size



In case of non-availability of sizeable quote, Investors can transact with the AMC in creation unit lots
Investors can transact both in form of cash or stock basket comprising the index
Units are created at live NAV price plus expenses
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R*Shares Banking ETF
Positioning – R*Shares Banking ETF

R*Shares Banking ETF is an Exchange Traded Fund (ETF) listed on NSE & BSE, and invests in stocks of Nifty
Bank Index in the same proportion as the underlying Index

R*Shares Banking ETF is less expensive than investing in individual securities of the Nifty Bank Index.

It provides an opportunity to investors for passively investing in a well-expanded portfolio of top banks as
per free float market capitalization, as approximately represented by Nifty Bank Index
Investment Objective: R*Shares Banking ETF
The investment objective of R*Shares Banking ETF (RBETF) is to provide returns that, before expenses,
closely correspond to the total returns of the securities as represented by the Nifty Bank Index.
However, the performance of Scheme may differ from that of the underlying index due to tracking
error. However, there can be no assurance or guarantee that the investment objective of the Scheme
will be achieved.
Benefits of R*Shares Banking ETF

Well Defined Portfolio: R*Shares Banking ETF investment strategy & stock selection is clearly defined; it
would replicate the Nifty Bank Index & invest only in companies forming the index in the same
proportion as the underlying

Diversification: Buying a single unit currently offers diversification of 12 stocks in the banking sector

Transparency: Nifty Bank Index constituents are made available in public domain on a daily basis by NSE

Liquidity: ETF units are traded on exchanges & can be easily liquidated during trading hours (subject to
availabiiity of buyer/Seller). Authorised Participants / Large Investors also have the option of coming to
the AMC for procurement/sale of units in creation unit sizes (1000 units with 1 unit equivalent to 1/10 of
Nifty Bank Index)

Hedging option available: The Index has a derivative listed on NSE called “BANKNIFTY” which can be
utilized to hedge the investment during extreme volatility

Sector Exposure with less Idiosyncratic risk: R*Shares Banking ETF allows one to take exposure to the
banking sector with relatively less stock specific risk, as risk gets diversified among basket of stocks

Index track Record: Launched in Sep-2003, base date 1-Jan-2000 the index has a track record of 10 years
Why Invest in Nifty Bank?
The Indian banking Industry has been undergoing major changes, reflecting a number of underlying
developments. Advancement in communication and information technology has facilitated growth in
internet-banking, ATM Network, Electronic transfer of funds and quick dissemination of information.
Structural reforms in the banking sector have improved the health of the banking sector. The reforms recently
introduced include the enactment of the Securitization Act to step up loan recoveries, establishment of asset
reconstruction companies, initiatives on improving recoveries from Non-performing Assets (NPAs) and change
in the basis of income recognition has raised transparency and efficiency in the banking system. Spurt in
treasury income and improvement in loan recoveries has helped Indian Banks to record better profitability.
Nifty Bank Index forms the representation of Indian Banking Sector currently having 12 stocks comprising both
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private and PSU banks qualifying as per the index selection criterion. It is amongst the most traded sector
index in India. With a lot of thrust being initiated from the new government on development, this sector
becomes attractive for investors. Few factors which would support the growth in Indian Banking sector in the
coming few years:
 Improving Indian Macros: Despite huge Volataility in markets there are strong fundamentals
favoring Indian macros like current and fiscal deficit trending lower , subsidy burden falling ,
inflation at multi-year lows and a falling interest rate environment.
 Weak Oil Prices: The recent oil price is decline is supportive for most major economies, including a
number of emerging markets.
 Interest Rate: If the interest rate in India stabilizes and starts moving down, it can substantially
affect the investment pattern
*Sources: Bloomberg, BofAML Global Research estimates, World Bank, CSO, RBI, Ministry of Finance, NSSO, MOSPI, Government of India, Ministry of
Industry, IMF, RMF Internal Research
Current Valuations

The P/E , P/B and dividend yield of Nifty Bank Index are as follows:
15-Sep-03 (Launch Date)
14-Jan-08 (High Valuation)
09-Mar-09 (Low Valuation)
29-Feb-16 (At Present)
Index Level
1875.79
10698.35
3339.70
13946.40
P/E
11.62
27.44
6.22
15.5
P/B
2.07
4.73
0.97
1.96
Dividend Yield
1.83
0.67
2.74
1.40
Note: Though Nifty Bank Index was launched on 15-Sep-03, the base date of the Index is 01-Jan-00. The historical index values of the index is available
on www.nseindia.com. The above dates are taken only for illustration purpose which suggests that even though absolute levels of Nifty Bank Index
increased, valuations are almost at the same levels or cheaper. Past performance may or may not be sustained in future. Investors are advised to
consult their financial advisor before making any investment.
Source: RMF Internal Research; and MFI (as on 29th Feb 2016)
Constituents of R*Shares Banking ETF as on 29th February 2016
S. No.
1
2
3
4
5
6
7
8
9
10
11
12
Stock
HDFC Bank Limited
ICICI Bank Limited
Kotak Mahindra Bank Limited
Axis Bank Limited
State Bank of India
IndusInd Bank Limited
Yes Bank Limited
Bank of Baroda
The Federal Bank Limited
Punjab National Bank
Canara Bank
Bank of India
Cash and Other Receivables
Grand Total
Weightage
33.58%
19.29%
11.34%
11.00%
8.58%
7.05%
3.93%
2.17%
1.39%
0.92%
0.40%
0.31%
0.04%
100.00%
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Note: The stocks mentioned forms a part of the portfolio of the scheme and may or may not form a part of
the portfolio in future. Please read Scheme Information Document carefully for more details and risk factors.
Source: RMF website
Scheme Features R*Shares Banking ETF
Nature of Scheme
Open Ended Exchange listed index linked scheme
Benchmark
Nifty Bank Index
Fund Manager
Omprakash Kuckian (w.e.f 01/09/2015)
Inception Date
24th June 2008
Rule of 20 -25
Rule of a minimum of 20 investors and no single investor accounting for more
than 25% of the corpus of the Scheme does not apply to ETFs
Asset Allocation
Securities constituting Nifty Bank Index : 90%-100%
Money Market instruments including CBLO : 0%-10%
Transparency/NAV
Disclosure
The NAV will be calculated and disclosed by the Fund at the close of every
Business Day which shall be published in at least two daily newspapers and also
uploaded on the AMFI site www.amfiindia.com and Reliance Mutual Fund site
i.e. www.reliancemutual.com.
Value of Unit
The value of each unit of the Scheme would be approximately equal to 1/10th
of the value of Nifty Bank Index
Load Structure
Entry & Exit Load : Nil
Minimum Application
Amount
Dematerialization
The minimum number of Units that can be bought or sold on the exchange is 1
(one) unit and in multiples of 1 unit.
Directly from AMC: Allowed to Authorized Participants & Large Investors in form
of creation unit size of 1000 units
Units of the scheme will only be available in Dematerialized (electronic) form
only
Scheme specific risk factors: The scheme invests in equity instrument and hence carries risk inherent in
equities. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of the
investments. Investment in Money Market is subject to liquidity, credit, interest rate & reinvestment risk. For
further Scheme specific risk factors, please refer the scheme information document.
Disclaimers
BSE Disclaimer: It is to be distinctly understood that the permission given by BSE Ltd. should not in any ways
be deemed or construed that the SID has been cleared or approved by BSE Ltd. nor does it certify the
correctness or completeness of any of the contents of the SID. The investors are advised to refer to the SID for
the full text of the Disclaimer clause of the BSE Ltd.
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NSE Disclaimer: It is to be distinctly understood that the permission given by NSE should not in any way be
deemed or construed that the Scheme Information Document has been cleared or approved by NSE nor does
it certify the correctness or completeness of any of the contents of the Draft Scheme Information Document.
The investors are advised to refer to the Scheme Information Document for the full text of the Disclaimer
Clause of NSE
The views expressed herein constitute only the opinions and do not constitute any guidelines or
recommendation on any course of action to be followed by the reader. This information is meant for general
reading purposes only and is not meant to serve as a professional guide for the readers. Certain factual and
statistical (both historical and projected) industry and market data and other information was obtained by
RCAM from independent, third-party sources that it deems to be reliable, some of which have been cited
above. However, RCAM has not independently verified any of such data or other information, or the
reasonableness of the assumptions upon which such data and other information was based, and there can be
no assurance as to the accuracy of such data and other information. Further, many of the statements and
assertions contained in these materials reflect the belief of RCAM, which belief may be based in whole or in
part on such data and other information.
The Sponsor, the Investment Manager, the Trustee or any of their respective directors, employees, affiliates
or representatives do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and
reliability of such information. Whilst no action has been solicited based upon the information provided
herein, due care has been taken to ensure that the facts are accurate and opinions given are fair and
reasonable. This information is not intended to be an offer or solicitation for the purchase or sale of any
financial product or instrument. Recipients of this information should rely on information/data arising out of
their own investigations. Readers are advised to seek independent professional advice, verify the contents
and arrive at an informed investment decision before making any investments.
None of the Sponsor, the Investment Manager, the Trustee, their respective directors, employees, affiliates or
representatives shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary
damages, including lost profits arising in any way from the information contained in this material.The Sponsor,
the Investment Manager, the Trustee, any of their respective directors, employees including the fund
managers, affiliates, representatives including persons involved in the preparation or issuance of this material
may from time to time, have long or short positions in, and buy or sell the securities thereof, of company(ies)
/ specific economic sectors mentioned herein.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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